2. Governance: Nigeria Governors’ Forum CNG Transit Programme

Context and Background

Nigeria’s effort to shift a substantial share of its transport system away from petrol and diesel has become one of the most consequential tests of intergovernmental coordination since the removal of the petrol subsidy in 2023. At the centre of that effort is the National Affordable Compressed Natural Gas Transit Programme (NACTP), a policy framework associated with the Presidential Compressed Natural Gas Initiative (PCNGI) and supported by the Nigeria Governors’ Forum (NGF).

The programme’s stated objective is ambitious: to reduce transport costs by as much as 50 per cent, support the conversion of more than one million commercial and private vehicles to compressed natural gas within three years, and build a national market for CNG-powered mobility. Its political logic is equally clear. Following President Bola Ahmed Tinubu’s announcement on 29 May 2023 that the long-standing petrol subsidy was no longer sustainable, transport fares rose sharply across Nigerian cities and rural communities. For millions of households, the removal of the subsidy became an immediate inflationary shock.

CNG is presented by policymakers as a partial answer to that shock. Nigeria possesses some of Africa’s largest proven natural-gas reserves, yet much of its transport fleet has historically depended on imported refined petroleum products or domestically distributed petrol and diesel. The policy proposition is that locally available gas, if delivered through reliable infrastructure and supported by financing, can offer a cheaper fuel source for buses, taxis, tricycles, delivery vehicles and eventually privately owned cars.

The initiative is not simply a technical conversion programme. It is a governance project involving federal agencies, state governments, transport unions, financial institutions, gas producers, vehicle assemblers, conversion workshops and private investors. Its success will depend not only on the number of engines converted, but also on whether the state can establish safe standards, transparent procurement, dependable gas supply and affordable credit for drivers whose incomes are already under severe pressure.

The Role of the Nigeria Governors’ Forum

The Nigeria Governors’ Forum, chaired by AbdulRahman AbdulRazaq, the Governor of Kwara State, occupies a strategic position in the CNG rollout. While the federal government controls major aspects of petroleum policy and interstate gas infrastructure, state governments regulate critical parts of the urban transport environment: motor parks, local roads, mass-transit schemes, vehicle licensing administration, land allocation and business permitting.

That division of responsibilities makes the NGF an important institutional bridge. States can identify routes where high-mileage vehicles would benefit most from conversion, allocate land for refuelling stations and conversion centres, coordinate with transport associations, and design targeted support for public transport operators. They can also integrate CNG buses into state-supported transit systems, including bus rapid transit corridors and urban mass-transit fleets.

The federal initiative, led operationally by the Presidential CNG Initiative and associated with programme director Michael Oluwagbemi, has emphasised vehicle conversions, refuelling infrastructure, local manufacturing and workforce development. The NGF’s involvement is meant to prevent the programme from becoming concentrated only in Lagos, Abuja, Port Harcourt and a handful of commercially attractive urban centres.

That risk is substantial. Gas distribution infrastructure has historically been uneven, with industrial clusters and major cities better served than many northern, eastern and rural communities. A truly national transit programme requires more than conversion kits. It requires a network of compression stations, transport pipelines or virtual gas distribution systems, trained technicians, cylinder-testing facilities, fire-safety systems and emergency-response capacity.

The central policy challenge is not whether Nigeria has gas, but whether it can deliver safe, affordable and dependable gas to the places where transport workers actually operate.

Why CNG Has Become a Public-Policy Priority

The case for CNG rests on both economics and environmental policy. CNG vehicles can generally produce lower carbon dioxide emissions than petrol- and diesel-powered alternatives, while also reducing certain local air pollutants when engines are properly maintained. In a country where urban air pollution is linked to respiratory illness and where traffic congestion intensifies fuel consumption, cleaner fleet technology has obvious public-health value.

For commercial drivers, however, environmental gains are unlikely to be the decisive factor. The immediate concern is operating cost. Taxi drivers, bus operators, tricycle riders and logistics businesses typically pass fuel-price increases to passengers and consumers. If CNG can be supplied at a sufficiently lower cost than petrol, it could reduce daily expenditure for vehicle operators and moderate fare increases. That is the basis for official claims that transportation costs could fall by up to 50 per cent.

Yet that outcome should be understood as a target, not a guaranteed result. Savings will depend on the retail price of CNG, distance to refuelling stations, vehicle fuel efficiency, the cost of conversion, maintenance requirements, financing terms and the stability of gas supply. A driver who must travel long distances to find a CNG station may lose much of the projected economic benefit. Likewise, conversion costs can remain prohibitive without subsidised loans, grants, lease-to-own arrangements or fleet-based financing.

Private Capital and the Question of Affordability

The NACTP model anticipates substantial private-sector participation. Investors are expected to finance refuelling stations, conversion workshops, gas logistics, vehicle assembly and related services. This approach reflects a wider Nigerian policy preference for public-private partnerships in infrastructure sectors where government budgets are constrained.

Private investment is indispensable, but it also introduces a tension. Investors seek predictable returns, while the public purpose of the programme is to make mobility affordable. The state must therefore decide whether it will offer tax incentives, land concessions, concessional finance, credit guarantees or regulated access to gas supplies—and how to do so without creating opaque subsidies or politically connected monopolies.

For ordinary operators, the core question is straightforward: who bears the initial cost? A commercial driver may accept CNG if the conversion is financed over time and the fuel savings exceed loan repayments. But if the driver must pay a large upfront sum, the programme risks benefiting corporate fleets and wealthier private vehicle owners before it reaches the workers most affected by the subsidy removal.

Legal and Policy Analysis

The legal architecture for the CNG programme is spread across Nigeria’s constitutional, petroleum, climate and consumer-protection frameworks. No single statute creates the NACTP as a standalone legislative scheme. Instead, implementation draws upon executive policy, regulatory powers and pre-existing laws governing natural gas, transport safety, public procurement and environmental regulation.

Federal Authority Over Petroleum and Gas

Under the Constitution of the Federal Republic of Nigeria 1999, petroleum resources are predominantly within the legislative competence of the federal government. The constitutional allocation of powers has historically enabled federal institutions to regulate exploration, production, pipeline transport and national energy policy.

Section 44(3) of the Constitution of the Federal Republic of Nigeria 1999 provides that the entire property in and control of minerals, mineral oils and natural gas in, under or upon any land in Nigeria shall vest in the Government of the Federation.

This provision gives the federal government the central role in managing natural gas resources. The Petroleum Industry Act 2021 (PIA) further reorganised the petroleum sector and placed greater emphasis on commercial, regulatory and midstream development. The Act is relevant to CNG because the programme depends on the midstream and downstream gas market: processing, transportation, compression, retail supply and safety regulation.

The PIA’s broader policy orientation supports gas utilisation and domestic value creation. However, legal authority over gas resources does not itself solve infrastructure shortages. The federal government may set policy and regulate the sector, but states retain substantial practical authority over land, local permits, urban planning, transport operations and the public order conditions necessary for facilities to function.

State Powers and Cooperative Federalism

The NGF’s role illustrates a form of cooperative federalism. Nigerian states cannot independently redesign the national gas market, but they can make or break the local deployment of CNG infrastructure. A refuelling station requires suitable land, planning consent, road access, safety inspection and community acceptance. A mass-transit conversion programme requires coordination with local transport unions and operators. State-level decisions will therefore determine whether the federal initiative reaches passengers beyond major commercial districts.

Intergovernmental agreements should clearly specify responsibility for land acquisition, infrastructure approvals, safety inspections, financing obligations and data reporting. Without this clarity, states may announce conversion targets without the stations or supply chains required to meet them. Conversely, federal funds or incentives could be deployed without adequate local oversight.

Safety, Consumer Protection and Procurement

Perhaps the most important legal issue is safety. CNG is stored under high pressure and requires certified cylinders, tested valves, properly installed piping and trained technicians. Poorly executed conversions could create serious risks of leaks, fire or explosion. The programme must therefore be governed by rigorous technical standards, licensing requirements, periodic inspection and traceable certification.

Regulatory oversight will involve institutions such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), alongside relevant standards, fire-service, transport and environmental bodies. The credibility of the programme will depend on whether these agencies can enforce rules consistently rather than allowing informal workshops to undertake unsafe conversions.

Consumer protection is also central. Under the Federal Competition and Consumer Protection Act 2018, consumers are entitled to protection from unsafe goods and services, misleading representations and unfair practices. Drivers purchasing conversion services need clear information about warranties, maintenance obligations, insurance consequences, expected fuel consumption and the availability of spare parts. If a conversion kit fails or a station sells contaminated or improperly compressed gas, customers require accessible mechanisms for redress.

Public procurement presents another area of scrutiny. Where states purchase CNG buses, provide conversion vouchers or award contracts for stations and workshops, procurement must comply with applicable federal or state procurement laws. Transparent tendering, disclosure of beneficial ownership and independent auditing are particularly important in a programme likely to attract major contracts and politically influential investors.

Social and Economic Stakes

The NACTP is being advanced at a time of acute economic strain. Inflation, currency volatility, food-price increases and high transport fares have reduced household purchasing power. In such conditions, the programme’s promise is politically potent: cheaper fuel could mean lower fares, lower logistics costs and less pressure on food prices.

But the distributional effects will matter. If CNG infrastructure is concentrated in affluent neighbourhoods and major commercial corridors, the benefits may bypass low-income communities and rural areas. If conversion financing is directed mainly to large fleets, independent drivers may be left behind. The programme should therefore prioritise high-impact public and commercial transport categories: city buses, intercity coaches, taxis, tricycles, school transport and vehicles moving agricultural produce.

There is also an employment dimension. A successful conversion sector could create jobs for mechanics, welders, safety inspectors, engineers, logistics workers and station operators. Training programmes, particularly for young people and technical-college graduates, could help build domestic expertise rather than relying heavily on imported labour and equipment. However, job creation claims must be accompanied by credible standards and certification, not merely short-term training announcements.

Impact and Future Outlook

The National Affordable Compressed Natural Gas Transit Programme has the potential to become one of Nigeria’s most significant post-subsidy economic interventions. Its strongest rationale is practical: Nigeria has gas resources, motorists face high fuel costs, and public transport requires relief. Its environmental case is also meaningful, especially if CNG displaces older diesel and petrol vehicles in densely populated cities.

Still, the programme should not be judged by launch ceremonies or headline conversion targets alone. Its durability will depend on measurable outcomes: the number of functioning refuelling stations, the affordability of conversions, the reliability of gas supply, safety compliance, the reduction in operating costs and the extent to which fare reductions reach passengers.

The NGF, PCNGI and private investors face a demanding implementation task. The programme will require transparent financing, coordinated regulation and an honest assessment of regional disparities in infrastructure. If those conditions are met, CNG could provide meaningful economic relief while advancing Nigeria’s transition toward a more gas-based and lower-emission transport system. If they are not, the initiative risks becoming another well-intentioned national policy whose benefits remain unevenly distributed and difficult for ordinary Nigerians to access.